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CAT 1994 — QA Question 44

Data SufficiencyEasy
Passage / Data

Each of these items has a question followed by two statements. As the answer,

Mark (a), If the question can be answered with the help of statement I alone,
Mark (b), If the question can be answered with the help of statement II, alone,
Mark (c), If both, statement I and statement II are needed to answer the question, and
Mark (d), If the question cannot be answered even with the help of both the statements.

If the selling price were to be increased by 10%, the sales would reduce by 10%. In what ratio would profits change?
I. The cost price remains constant.
II. The cost price increased 10%.

Answer & solution

Correct answer: b

  • A

    a

  • b

  • C

    c

  • D

    d

Solution

P = (SP – CP) x Sales. From the data given in the question we can figure out that P1 = (1.1SP – CP) x
0.9Sales. Hence PP1=1.11(SP-CP)(1.1SP-CP) To find this ratio we need to eliminate the variables CP & SP. This can only be done if in the denominator, CP is replaced by 1.1CP. In other words, if the CP increases by 10%, as in that case our ratio will be 1.111.1 = 1.01. Hence only Statement II is required to answer the question.

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CAT 1994 QA Q44: If the selling price were to be increased by 10%, the sales would reduce by 10%. In what ratio would profits c — Solution | TheCATExam